Price rises and rising demand for new-build property in hot spots along the Costas together signal a turning of the corner for Spain’s property market in 2015.
Recent statistics from the Spanish government reveal that for the first time since 2007, there are more new homes being started than completed in the country in 2015. According to the figures, in the first two months of this year, a total of 7,640 new-builds were begun, which is not only a 48.2 per cent increase compared with the same period in 2014 but also a higher number than the 6,637 new-builds that were completed during January and February.
At the same time, statistics from Spain’s widely recognized TINSA Index show that average property prices in the country’s Mediterranean coastal areas and larger cities have risen since the end of 2014.
New developments are found predominantly in major Spanish cities and hot spots along the Costas. Agents in the Costa del Sol are now reporting that the restricted supply of new developments in prime tourist residential areas is putting upward pressure on prices. This is being fueled by the return to the market of more discerning international buyers, who prefer new-build homes and are not interested in the raft of resale properties around Marbella and in resorts along Mijas Costa, such as Benalmadena, Fuengirola and Calahonda.
“The small number of new projects available in sought after areas, particularly the resorts of the Costa del Sol and Costa Blanca, including developments that were completed but stood empty before being refurbished by banks, mean choice for quality new homes is limited,” said Julian Walker of PropertyandSpain.co.uk. “I heard of one small development in Benalmadena selling out within a few weeks earlier this year as there was simply nothing else like it in the area. Conditions like this help to push up prices on new-build developments.”
Meanwhile, in the Costa Blanca, a rising number of buyers are investing in new projects in and around Torrevieja and the Orihuela Costa, where confidence amongst builders has returned. The attractions of purchasing a new-build or off-plan property include the ability to choose fixtures and fittings, the potential capital appreciation the property could realize, the use of modern, energy efficient building materials and the 10-year build guarantee that comes with it.
The favorable exchange rate has also helped attract more British buyers to Spain in 2015. Since March, Sterling has been hovering around a seven-year high against the euro, making property in Spain much cheaper to investors from the UK. In real terms, a €100,000 home in Spain costs around £10,000 less than a year ago, thanks to nothing more than a weaker euro.